Sleepwell Parent To Acquire 35% Stake In Furlenco For INR 300 Cr

Sheela Foam on Monday (July 17) said it would acquire a 35% stake in House of Kieraya, the parent company of furniture rental startup Furlenco, for INR 300 Cr.

In an exchange filing, Sheela Foam, which owns popular mattress brand Sleepwell, said its board approved the acquisition, which would help the company enter the fast-growing branded furniture market, during its meeting on Monday. 

However, the company didn’t disclose if it would acquire the startup through equity infusion or through a secondary sale. Based on the acquisition cost, House of Kieraya is now valued at around INR 857 Cr.

Sheela Foam said that Rangoli Resorts Private Limited, a related party, is amongst the 80 shareholders of House of Kieraya and currently owns 1.6% of share capital in House of Kieraya. Rangoli Resorts Private Limited is a lender in the House of Kieraya. 

It must be noted that Rangoli Resorts Private Limited has infused INR 73 Cr in Furlenco across three tranches in FY24 so far.

Founded in 2012 by Ajith Mohan Karimpana, Furlenco operates an online subscription-based furniture rental platform in Bengaluru, Mumbai, Delhi NCR, among others. 

The startup, apart from renting furniture, also operates a furniture marketplace, thus competing with the likes of Pepperfry and Urban Ladder. 

In 2021, Furlenco rejigged its business model and created House of Kieraya as an umbrella brand, which houses Furlenco, remanufactured furniture marketplace Furbicle, and annual subscription vertical  UNLMTD. 

At the time of filing the story, Furbicle’s website redirected to Furlenco, while UNLMTD’s website didn’t allow buying a new subscription. 

It must be noted that Furlenco laid off around 180 employees to cut costs in March 2022. Inc42 then reported that with the layoffs, the startup was looking at achieving profitability ahead of its potential public listing.

Furlenco’s standalone net loss soared 71% to INR 148.6 Cr in FY22 from INR 86.9 Cr in FY21. While expenses shot up over 63% to INR 285.9 Cr in FY22 from INR 175.2 Cr in FY21, operating revenue jumped to INR 128.8 Cr from INR 84.3 Cr in FY21. 

While the startup is yet to file its audited financial report for FY23 with the RoC, Sheela Foam disclosed in the filing that House of Kieraya’s unaudited turnover stood at INR 152 Cr in FY23. 

The startup last raised $140 Mn in its Series D funding round. The funding round, led by Zinnia Global Fund, CE-Ventures and Lightbox Ventures, comprised $120 Mn of venture debt and the remaining portion was equity funding. 

Furlenco currently competes against the likes of RentoMojo, NoBroker, Pepperfry, Urban Ladder among others. 

Besides acquiring a stake in House of Kieraya, Sheela Foam said it would also acquire 94.6% stake in Kurlon Enterprises Limited (KEL) for INR 2,035 Cr.